Nikkei flat in subdued trading; Syria tensions weigh

Reuters Staff

3 Min Read

* Nikkei, Topix end morning session flat
* Syria tensions keep many investors sidelined, eye on Asian
markets
* Tepco bounces back strongly
By Tomo Uetake
TOKYO, Aug 27 (Reuters) - Japan's Nikkei share average ended
Tuesday morning flat, as cautious investors sat on the sidelines
after the United States hinted of possible military action
against the Syrian government over an alleged chemical weapons
attack.
The benchmark Nikkei was almost flat at 13,639.60 by
the midday break, and the broader Topix was also little
changed at 1,140.40.
U.S. stocks had traded higher for most of Monday's session,
as sharply weaker orders for durable goods eased investors'
worries of a cutback in the Federal Reserve's economic stimulus,
but ended lower after U.S. Secretary of State called Syria's use
of chemical weapons "undeniable."
The possibility of U.S. military action against Syria also
appeared to hurt regional markets, with Australian shares
off 0.1 percent, while Shanghai and Hong Kong
stocks were down 0.2 percent and 0.3 percent,
respectively.
"Worries on Syria are certainly weighing on the global
markets. Investors fear Syria could become the next Iraq," said
Kenichi Hirano, a strategist at Tachibana Securities.
"But taking the recent gains into account, Asian reactions
were not that bad. That's why the Nikkei pared the losses in the
last hour of the morning session."
Exporters were mixed, with Toyota Motor Corp off
0.6 percent, Nissan Motor Co Ltd down 0.7 percent,
while Sony Corp rose 3.5 percent.
"Trading remains subdued as most players are reluctant to
trade actively, ahead of potentially market-moving events in
early September," said Masayuki Doshida, senior market analyst
at Rakuten Securities.
In September investors would get confirmation from the Fed
on whether it would indeed start tapering its stimulus in the
month, a possibility that has roiled global markets over the
past three months.
Emerging markets in Asia, particularly in India and
Indonesia, have had a torrid time in recent weeks on concerns
about a turn in Fed policy.
Tokyo Electric Power Co Inc was a notable performer
on Tuesday morning, soaring 10.4 percent on expectations that
the utility would receive further government funding to deal
with radioactive water at its crippled Fukushima nuclear power
plant.
The stock, which has tumbled 27 percent over the past six
sessions, was the most traded stock by turnover on the main
board in early trade. It is still up 150 percent so far this
year, and has outpaced the Nikkei.
The Nikkei is up 31 percent this year and the yen is down 13
percent against the dollar, spurred by the government's fiscal
expansionary policy and the Bank of Japan's aggressive monetary
stimulus.